Question 1

All of the following are valid reasons flora business to hold cash and marketable securities except to

Accepted Answer

D

Explanation: A company will hold cash and marketable securities to facilitate business transactions; cash is a medium of exchange. Cash and near-cash items are also held to meet future needs, to satiety compensating balance requirements imposed by lenders, and to provide a precautionary balance for securely purposes. Cash is usually not held in an attempt to earn maximum returns on investment because cash and marketable securities are not 1usually the hajjes paying investments.

Question 2

The risk of loss because of fluctuations in the relative value of foreign currencies is called

Accepted Answer

C

Explanation: When amounts to be paid or received are denominated in a foreign currency, exchange rate Fluctuations may result in exchange gains or losses. or example, if a U.S. firm has a receivable fixed in terms of units of a foreign currency, a decline in the value of that currency relative to the U.S. dollar results in a foreign exchange loss.

Question 3

Which of the following statements is true with regard to a vertically integrated acquisition?

Accepted Answer

C

Explanation: Vertical integration occurs upstream (backward) by acquiring suppliers or downstream (forward) by acquiring wholesalers and retailers. An example of forward integration is clothing manufacturer’s acquisition of a chain of clothing stores in which to sell kits products.

Question 4

Whitehall Corporation produces chemicals used in the cleaning industry During the previous month,
Whitehall incurred $300,000 of joint costs in producing 60,000 units of AM-12 and 40000 units of
BM-36. Whitehall uses the units-of-production method to allocate joint costs. Currently, AM-i 2 is
sold at split-off for $3.50 per unit. Flank Corporation has approached Whitehall to purchase all of the
production of AM-12 after further processing. The further processing will cost Whitehall
$90000.Assume that Whitehall Corporation agreed to sell AM-12 to Flank Corporation for $5.50 per
unit after further processing. During the first month of production, Whitehall sold 50,000 units with
10,000 units remaining in inventory at the end of the month. With respect to AM-12, which one of
the following statements is true?

Accepted Answer

B

Explanation: Joint costs are allocated based on units of production. Accordingly, the unit joint cost allocated to AM-12 is $3.00 [$300,000 + (60,000 units of AM-12 + 40,000 units of BM- 36)]. The unit cost of AM- 12 is therefore $4.50 [$3.00 joint cost + ($90,000 additional cost + 60,000 units)]. Total inventory value is $45,000 (10,000 units x $4.50), and total operating profit is $50,000 [50,000 units sold x ($5.50 unit price — $4.50 unit cost)]

Question 5

Strategic planning is?

Accepted Answer

C

Explanation: Strategic planning, also called long-term planning. Covers periods from 1 to 20 years. Strategic planning is somewhat difficult because of uncertainty about future conditions. Thus, long-range plans are more general and exclude operational detail.

Question 6

What form of marketing assumes most people in the same demographic will react similarly to one marketing message?

Accepted Answer

Answer available on page.

Question 7

A market follower is a firm that does not choose to challenge the market leader. This firm must have
its own strategy for maintaining its share of the market. When the firm improves products that are
already on the market and operates in different markets, it is a (n).

Accepted Answer

D

Explanation: An adapter improves products and may operate in different markets or evolve into a market challenger

Question 8

Strategic planning is

Accepted Answer

Answer available on page.

Question 9

An organization would usually offer credit terms of 2/101 net 30 when

Accepted Answer

D

Explanation: Because these terms involve an annual interest cost of over 36%, a company would not offer them unless it desperately needed cash. Also, credit terms are typically somewhat standardized within an industry. Thus, if most companies in the industry offer similar terms. a firm will likely be forced to match the competition or lose market share.

Question 10

Assume that each day company writes and receives checks totaling $10,000. If it takes 5 days for the
checks to clear and be deducted from the company’s account, and only 4 days for the deposits to
clear, what is the float?

Accepted Answer

A

Explanation: The float period is the time between when a check is written and when it clears the payer’s checking account. Check float results in an interest-free loan to the pay or because of the delay between payment by check and its deduction from the bank account. If checks written require one more day to clear than checks received, the net float equals one dais receipts. The company will have free use of the money for one day. In this case, the amount is $10,000.

Question 11

Which necessary approach to marketing control is the responsibility of senior and middle management and is directed toward achievement of planned objectives?

Accepted Answer

A

Explanation: Annual-plan control should be overseen by senior and middle management. It is supplied at all levels of the firm using management-by-objective (MBO) methods. Annual plan control is directed toward reaching sales, profitability, and other objective defined in the annual plan. Interim-period objectives are set, performance is monitored, the causes of variances are identified, and corrective action is taken.

Question 12

Market-based pricing bases prices on

Accepted Answer

B

Explanation: Market-based pricing bases prices on the product’s perceived value and competitors’ actions rather than on the seller’s cost. Announce variables in the marketing mix (image, seller’s reputation, warranties. customer service, and channel attributes) augment the perceived value

Question 13

Upmarket stretching mat reflect

Accepted Answer

A

Explanation: Upmarket stretching may reflect a search for growth, greater profit margins; or positioning as a full product line seller

Question 14

Which barrier to global competition limits global procurement and achievement of economies of scale?

Accepted Answer

B

Explanation: Product needs may differ from country to county because of culture, climate, degree of economic development, income, legal requirements, technical standards, and other factors. This barrier limits the ability to achieve economies of scale in global procurement. The height of the barrier depends on the cost of product modifications.

Question 15

Which security is most often held as a substitute for cash?

Accepted Answer

A

Explanation: A treasury bill is a short-term U.S. government obligation that is sold at a di count from its face value. A treasury bill is highly liquid and nearly risk-free, and it is often held as a substitute for cash.

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